There’s nothing worse than heading to a new home, only to be stuck with no car. Whether you’re traveling for work or leisure, an extended stay without your vehicle can be a pain. Of course, there’s always the option of a rental car, but the costs can add up after a while.

Instead of racking up the cost of a rental car or braving public transit, many choose to ship their car to their new location.

Many people choose a car transport shipping method when moving or traveling for a long period of time. If you’re considering shipping your car to another state, you may be wondering what type of insurance policy you’ll need to cover it. Read on for everything you need to know about auto transport insurance.

Types of Auto Insurance

When shipping a car, a basic insurance policy is required—but what about car transport insurance?

The general rule of thumb is this: you don’t need to purchase additional auto insurance when shipping your car, but it may be a good idea.

A car shipping company is generally required to have liability insurance for the vehicles in their care. In addition to this minimum liability coverage, taking out another policy may help you avoid expensive deductibles. Here are the key differences between liability insurance and additional coverage:

  • Liability insurance – As a requirement of the Department of Transportation, all auto transporters must have some form of liability insurance. This policy will only cover damages caused by the car shipping company. While this may seem adequate, filing a claim can be difficult if you cannot prove the transporter is at fault. \ \ Additionally, these claims can come with high deductibles, leaving the vehicle owner responsible for a large portion of the damages.

  • Cargo insurance – Many shipping companies offer cargo insurance for an added fee. This type of policy will cover a much wider range of damage than the minimum liability insurance. While liability coverage will only pay for damages specifically caused by the transporter, cargo insurance covers natural disasters, theft, and accidents caused by a third party.

The Bottom Line – An auto transport company will pay for damages past a certain amount, but liability insurance may stick the vehicle owner with expensive deductibles. Taking out an additional policy will keep you better protected in the event of an accident.

Are There Different Types of Cargo Insurance?

When it comes to cargo insurance, there are some differences between policies. The two basic categories of cargo insurance are:

  • All-risks – The more expensive of the two insurance options, an all-risks policy covers the widest variety of damages. This is the best type of coverage for those shipping expensive vehicles. If you’re unsure of what damages your car may face, it’s best to go with an all-risks policy, just to be safe.

  • Named perils – A named perils policy will typically be cheaper but provide less coverage. With this type of insurance, you will only be protected from damages specified in your contract. If you’re on a tight budget or you’re particularly familiar with potential shipping damages, this is the cheapest way to ensure your vehicle.

The Bottom Line – Your shipping company may offer different types of cargo insurance. An all-risks policy will offer more coverage, while a named perils policy will only protect you from damages you specify beforehand.

Are There Any Other Types of Insurance?

While these are the main insurance policies necessary for auto transport, you may want to invest in some other types of basic coverage. The most common categories of auto insurance that drivers depend on are:

  • PIP Personal injury protection insurance, also known as PIP, is intended to protect both parties in the event of an accident. A PIP policy will cover medical bills, lost wages, or funeral costs—no matter who is at fault for the accident.

  • Comprehensive coverage – This type of insurance covers damages unrelated to an auto accident. These factors may include vandalism, weather, or fire. A comprehensive policy will typically have a moderate deductible attached to it.

  • Uninsured motorist coverage – An uninsured motorist policy will cover damages in the event of an accident with another driver who is uninsured (or underinsured). This is meant to be used as a backup in case the other party cannot pay for the damage they’ve caused.

The Bottom Line – Insurance is a crucial part of car ownership, even after your vehicle is delivered safe and sound. Make sure you’re fully covered before you get back on the road, wherever your destination.

Always Protect Yourself

No matter where your vehicle is, it’s always important to protect yourself. The additional fee of cargo insurance may seem excessive, but you won’t regret splurging on it if your car ends up damaged in vehicle transport. And while you may already be dealing with the intricacies of how to transport a car to another state, obtaining insurance for the car shipping process is simple and can give you valuable peace of mind.

Always make sure to vet your auto transporter prior to signing any contracts. Search for their motor carrier number on the DOT website, and check out reviews with the Better Business Bureau. To compare affordable insurance policies, use Online Auto Insurance to find the coverage you need!

Sources:

UShip. Auto Shipping Insurance Requirements.\ https://www.uship.com/guides/auto-shipping-insurance-requirements-2/

USA Truckload Shipping. Carrier Liability vs Cargo Insurance Explained.\ https://usatruckloadshipping.com/carrier-liability-vs-cargo-insurance-explained/

Geyers Towing. Why You Need Car Shipping Insurance.\ https://geyerstowing.com/why-you-need-car-shipping-insurance/

Move.org. What to Know About Auto Transport Insurance.\ https://www.move.org/what-to-know-about-auto-transport-insurance/

The Hartford. What is Personal Injury Protection.\ https://www.thehartford.com/aarp/car-insurance/personal-injury-protection

Allstate. Six Types of Car Insurance Explained.\ https://www.allstate.com/tr/car-insurance/components-auto-insurance.aspx